million-franc-spending-survey-switzerland-2019
Banking News

How Would Swiss Use a Million-Franc Windfall?

August 6, 2019 - Benjamin Manz

How would the average Swiss consumer use 1 million Swiss francs if they had it? A representative survey by independent comparison service moneyland.ch answers this question and provides insights into differences based on linguistic regions, personal wealth, genders and age groups.

moneyland.ch asked 1500 residents how they would use a 1 million-Swiss-franc windfall. The question was simple: “If you were to be given 1 million Swiss francs, how likely would you be to use that money or part of it for the following purposes?” Participants rated their likelihood to spend all or part of the 1 million francs on each option on a scale of 1 (not at all likely) to 10 (very likely).

The results show that Swiss are relatively conservative in their use of money – even when they unexpectedly come into big money. The majority of consumers would invest the money conservatively. There are interesting differences in how people would use the money depending on the region they live in, their gender, wealth and age. “Women are more likely to give away or donate money than men. Residents of French-speaking Switzerland are more likely to give away money than residents of German-speaking Switzerland,” states moneyland.ch CEO Benjamin Manz.  

Savings accounts first, bitcoin last

Swiss are most likely to place the unexpected million in a savings account, with 64% of consumers rating this option as likely to very likely (ratings of 7 to 10 points). Using the money for the purchase of an apartment or house is the next most popular option (56%) followed by spending the money on travel (50%), reducing work hours (44%), spending the money on good food (42%) and investing in pillar 3a retirement savings (39%).

Options which less consumers are likely to spend on include buying a new car (35% are likely to do this), renting a new home (34%), donations (29%), gifts (29%) and investing in gold (26%).

Less popular options include: not working at all (24% are likely to do this); investing in actively-managed mutual funds (23%); investing in life insurance (21%); investing in bonds (20%); depositing the money in a safe or safe deposit box (20%); increased luxury spending (15%); investing in exchange-traded funds (ETFs) (12%); and lastly, investing in bitcoin (8%).

“Swiss are generally risk-averse, as this survey confirms. They are most likely to go with the ultra-conservative option of depositing the gifted million Swiss francs in a savings account at a bank,” concludes Benjamin Manz. The high-risk option of investing in cryptocurrencies like bitcoin appeals to the smallest percentage of consumers.

Röstigraben: German-speaking vs. French-speaking Switzerland

The differences between German-speaking and French-speaking Switzerland are particularly interesting. Depending on the option in question, differences across linguistic boundaries can be significant.

Only 11% of French-speaking Swiss are likely to spend all or part of the gifted million francs on increased luxury spending, compared to 17% of German-speaking Swiss. A high 69% of French-speaking Swiss are likely to spend all or part of the money on buying property, compared to 50% of German-speaking Swiss. French-speaking Swiss are also more likely to invest in gold (31%) than German-speaking Swiss are (23%). Keeping the money in a safe is also more popular among French-speaking Swiss (27%) than among German-speaking Swiss (17%).

“French-speaking Swiss are generally more likely to cut down on work after receiving the unexpected fortune,” says moneyland.ch analyst Silvan Wehrli. 55% of consumers in French-speaking Switzerland are likely or very likely to cut down on work after obtaining the million Swiss francs, compared to 38% of German-speaking Swiss. A fairly high 34% of French-speaking Swiss are likely to stop working altogether after receiving the million francs, compared to 19% of German-speaking Swiss.

French-speaking Swiss are also more likely to donate money to causes which they care about, with 35% being likely to donate at least part of the money – compared to 26% of German-speaking Swiss. A high 46% of French-speaking Swiss are likely to give away at least part of the million francs as gifts, compared to 20% of German-speaking Swiss.

Women are more likely to donate than men

Gender-based differences are also significant, although they are less pronounced than the differences between linguistic regions. Women are more conservative than men when it comes to investing money. Stock investments are less popular among women, with savings accounts being a far more popular option. A high 71% of women are likely to deposit at least part of the money in a savings account, compared to 57% of men.

“Women are also more likely to donate money than men,” states Silvan Wehrli. 33% of women are likely to donate or give away at least part of the money, compared to 25% of men. Women are also more likely than men to spend on buying or renting a new home, traveling or buying a new car.

Young adults likely to continue working after the million-franc windfall

Age-based differences are also significant. A high 75% of adults between the ages of 18 and 25 years old are likely to deposit at least part of the million-franc windfall in a savings account – compared to 68% of adults between 26 and 49 years old and 55% of adults between 50 and 74 years old.

The older the consumer, the more likely they are to invest the million francs in gold, actively-managed mutual funds, bonds and even cryptocurrencies. Young adults are more likely to donate money, with 36% of adults in the youngest age group being likely to donate, compared to 28% of adults in older age groups.

Young adults are also more likely to spend the money on good food, on renting a new home or on increased luxury spending. The majority of young adults are realistic when it comes to cutting down on work. Only 27% of adults between the ages of 18 and 25 are likely to cut down on work after receiving a million francs, compared to 48% of adults between the ages of 26 and 49 years old and 46% of adults between the ages of 50 and 74 years old. Not working at all is a likely option for 13% of young adults, compared to 19% of middle-aged adults and 34% of adults in the highest age group.

Wealthy individuals are more likely to invest and less likely to donate

The personal wealth of individuals also plays a role in how they would spend a million-franc windfall. The greater their personal wealth is, the less likely consumers are to place all or part of the money in savings accounts and the more likely they are to invest in the stock market. 70% of adults in the lowest wealth bracket (20,000 francs of assets or less) are likely to deposit the money in savings accounts, but only 25% of consumers in this bracket are likely to invest in the stock market. On the other end of the scale, 64% of millionaires are likely to invest in the stock market, while only 45% are likely to place the money in savings accounts.

“Wealth does not make individuals more generous. On the contrary: the higher the personal wealth of individuals, the less likely they are to donate money,” states Benjamin Manz. Consumers in the highest wealth bracket are less likely to donate or give away the money than consumers in lower wealth brackets.

Differences between urban and rural residents

Differences between urban and rural dwellers are less notable. Rural residents are generally more conservative in the ways they would use a windfall than urban residents. Rural residents are less likely to invest in higher-risk investment vehicles than urban residents. Rural residents are also more likely to spend the money on a new car (41% compared to 33% of urban residents).

More on this topic:
Savings account comparison
Personal loan comparison
Online broker comparison

Request now for free

Leading credit cards

Free credit card

Swisscard Cashback Cards Amex

  • No annual fees

  • Two cards Amex & Visa/Mastercard

  • With cash back

Free credit card

Migros Cumulus Visa

  • No annual fees

  • With Cumulus points

  • Without foreign currency fees

Trading platforms

Brokers with low fees

Swiss Broker

FlowBank

  • Swiss online bank

  • No additional exchange charges

  • No transaction fees for Swiss equities

Swiss Broker

Saxo Bank Switzerland

  • Swiss online bank

  • Favorable prices stock trading

  • High account interest rates

Swiss Broker

Cornèrtrader

  • Swiss online bank

  • No custody fees for stocks

  • Free market research and trading signals

Request now for free

Cheap bank accounts with card

Free bank account

Yuh

  • No account fees

  • Banking partner: Swissquote & Postfinance

  • CHF 20 trading credit with code «YUHMONEYLAND»

Swiss digital bank

Alpian

  • Multi-currency account with Visa card (CHF, EUR, USD, GBP)

  • Favorable foreign exchange rates

  • CHF 100 welcome bonus

Online private account

UBS key4

  • 50 KeyClub points as a welcome gift

  • Online private account with debit card

Expert Benjamin Manz
Benjamin Manz is CEO of moneyland.ch and an independent expert on banking and finance.